A general comment on the USD – if the immediate situation with Greece is resolved over the bank holiday weekend expect the Euro to gain next week which could cap the upside in the USD which is acting as a safe haven, especially with recent weakness in equity markets. However, with most commodities trending higher despite facing the headwind of recent USD strength this year – especially gold – expect a significant rally on the upside in commodities and all assets traded against the USD in the event that it sells off in the coming weeks.
I personally hope it all ends well with Greece, it is a fantastic country to visit and it may well be best for the nation – and all round - if they leave the Euro without further ado – as this would help domestic matters immediately, but it would come hand in hand with a default on their Sovereign debt – a story I highlighted at the start of this year.
Trading conditions have been challenging this year so far – but market move in phases and should the US Dollar weaken, commodities will swiftly move higher – on the other hand – if as I suspect there may be an equity market sell off (this being a bear market rally in my opinion) then it could hinder progress on the upside.
Anyhow – Gold is moving up, long from 1,158 and currently nicely in profit – a close over $1,200 will signal more upside and this will mean an add on position – if the market trends upward and this is a new ‘upleg’ it could run north of $1,400 and $1,500 by year end – one not to miss out on.
